by By Josie Le Blond, Special for USA TODAY

by By Josie Le Blond, Special for USA TODAY

TBILISI -- Nine years after he ushered in a democratic Georgia, President Mikheil Saakashvili conceded defeat Tuesday after parliamentary elections showed a surge of support for a billionaire who made his money in Russia.

"I express my respect toward the decision of the majority," said Saakashvili in a live TV address to the nation.

Billionaire Bidzina Ivanishvili's Georgian Dream coalition won a parliamentary majority and will be able to form a new government, though Saakashvili's term does not expire for another year.

Saakashvili has been in power since the peaceful Rose Revolution ended unrest in a country that was once under Soviet domination until it declared independence in 1991. He overhauled a Communist-style economy and steered the country away from Russian influence and toward the West.

Though the economy grew significantly over the years, poverty remained a problem, and his opponents charged him with authoritarian tactics similar to those once used against Georgians by the Soviets.

Two weeks ago, video footage was made public of conditions in a Tbilisi prison showing inmates being tortured and raped. Thousands of protesters poured into the streets.

After Ivanishvili's victory, his supporters flooded the streets of the capital, blasting car horns and waving flags in celebration until the early hours of the morning.

"It's a party; everyone's here to enjoy it," said Nata Bokuchava, 32.

Ivanishvili made his fortune in post-Soviet Russia in computer and banking businesses. He has promised to improve relations with Georgia's powerful neighbor and strengthen economic ties, though he says he is not a supporter of Russian President Vladimir Putin.

"Ivanishvili's election may help to break the stalemate between Russia and Georgia â?? this is not necessarily bad news for the West," said Lilit Gevorgyan, political analyst at IHS Global Insight. "It will help the EU and U.S. to iron out one more wrinkle in their relations with Russia, which saw a serious blow as a result of 2008 Georgian-Russian war."

Ivanishvili is not likely to be a purely pro-Russian leader but will attempt to tightrope between a potential economic partner Russia and the West, she said.

"Georgia will develop a multidirectional foreign policy, trying to balance its already good relations with the West with newly reviving ties with Russia," she said.

Few deny the scale of change in the country since 2003: The once widespread petty corruption among police and low-level officials has been all but wiped out and everyday security for ordinary people has massively improved.

But unemployment remains high outside of the cities, and rising food and electricity prices mean many feel worse off under Saakashvili than they had been under Soviet rule.